23 April 2021

What the UK can learn from China’s Military-Civil Fusion programme

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China takes the study of history very seriously. For years its civil servants have been scrutinising the West, trying to learn the secrets behind its hundreds of years of world domination. One of the areas it has paid special attention to is the link between the civilian and the military when it comes to technological development, a combination that has supported British and American power over the centuries. 

Nowhere was this better seen in collaboration between the two nations than at the Battle of the Atlantic in World War Two. As the German Admiral Dönitz wrote in 1943, his prized U-boats mostly scattered on the seabed, the Allies’ success was “not through superior tactics or strategy, but through superiority in the field of science”. Allied investment in science and technology was a fundamental part of their eventual success in the war.

In recent years, however, it would appear that Britain has forgotten this lesson. Between 2008 and 2019 government investment in UK defence research and development (R&D) fell by 11%, leading to the loss of 2,000 jobs. To put things in perspective, the amount spent on defence R&D is now less than the R&D budget of HSBC, a bank.

Yet as the UK has decreased its defence R&D, so have our strategic competitors increased their own. Russia, for instance, has spent the last decade investing heavily in research to underpin its military modernisation programmes, much to the regret of countries like Ukraine.

It is China though that has invested the most. Beijing has realised that the key to developing its military, intelligence, and security apparatus is the civilian economy, which includes 30% of the world’s manufacturing. To that end, Beijing has developed a national programme called Military Civil Fusion (or MCF), which leverages the country’s economic strength by compelling civilian firms to support the development of China’s armed forces.

It is not one way traffic, however. Much of the technology is dual-purpose, such as an algorithm created to work out when a friendly soldier wanders into the line of fire; this could also help self-driving cars to avoid knocking down a pedestrian that walks into the road. In 2017 China established a central commission to oversee and coordinate the development objectives of the military and their civilian partners, a task made easier by the government inserting special committees into its leading technology companies to ensure that their goals do not stray too far from those of the state. It is no surprise that the founder of Huawei, Ren Zhengfei, started his career in the People’s Liberation Army: the links between the military and civilian worlds run deep there. 

China is reaping the rewards of its MCF programme, for example with its new quantum computing network, which has distinct and world-leading applications in both war and peace. Although the connection between the civilian and military worlds isn’t as strong as it once was, the good news is that there is still considerable interaction between them in the UK too. 

Britain retains a number of large multinationals which spend considerable sums on military R&D, and which augment the official figures by developing technology that generally ends up supporting Ministry of Defence projects. Rolls Royce, for instance, reported gross R&D spend of £1.46 billion in 2019, and BAe, another British champion, spent £1.5 billion on R&D in the same year. 

It’s not just the large multinationals that are working with the military. The UK’s new Defence and Security Industrial Strategy has set out plans to increase opportunities for SMEs to do business with the government.

This increased focus on what the private sector can do for the military began to accelerate in the early 2000s when government defence laboratories were privatised. British universities, which have long collaborated with the armed forces, were winners of this change in research methodology, generating millions of pounds in MoD funding. A 2015 report concluded that the overwhelming majority of UK universities have at least some links to military interests. Not everyone approves, however: the British-based journal Nature said in a 2018 editorial that governments asking universities to help develop weapons was “a threat to the culture and conscience of researchers”.

Whatever Nature’s misgivings, there are clear and proven benefits of interlinking civilian and defence research. Many of the world’s core technologies today – from jet engines to radar to semiconductors – resulted from military investment. Most of the information and communication technology in use, including the internet, stems at least in part from developments made by DARPA, the United States’ Defense Advanced Research Projects Agency. To underline the importance of the link, research suggests that in OECD countries a 10% increase in defence R&D results in a 4% increase in private R&D.

This knock-on effect for private R&D may be more pronounced in China, where MCF is not just about boosting the military. Its civilian technology companies win significant contracts from the People’s Liberation Army, which enhances their commercial power and in turn allows them to better compete against Western rivals. The Chinese company Nuctech, which sells and operates cargo- and people- scanning systems around the world, provides technology and maintenance for the PLA, and is also a major competitor to the British company Smiths Group.

Unfortunately, the MoD doesn’t have the same opportunities to push contracts to British technology firms as they often simply don’t exist in the required sector. Instead, much of the tech work is won by American giants such as Amazon and Microsoft. Small British technology companies are being included in the MuD’s plans, for example the artificial intelligence specialists Adarga, but at the moment much of British government investment is by necessity heading abroad. Whilst there are pros and cons to this  – the American government spends heavily with British firms, and indeed 43% of BAe’s sales in 2019 were from the US – defence R&D is a source of funding that can and should be used to bolster the further development of Britain’s civilian technology sector.

China’s new Five-Year Economic plan, confirmed earlier this year, calls for the country to focus on eight areas of technological development. These include robotics, aircraft engines, and new energy vehicles and smart cars, all of which have clear dual military-civilian uses, and which will undoubtedly receive significant amounts of military R&D investment. British companies in these sectors will therefore soon come under increasing commercial pressure from Chinese competitors flush with PLA cash.

Whilst much of the MCF’s success is based on non-democratic coercion, it is impossible not to be impressed with the general level of connectivity that has been achieved between the military and the civilian worlds, both of which see the benefits to deeper cooperation. Given China’s increasing international assertiveness it is imperative that the UK study the MCF to see which parts it can learn from. After all, a better supported military-civilian defence programme in the UK would not only allow Britain’s Armed Forces to keep up with the technological developments of the PLA, it would also provide material support to the UK’s technology and industrial firms. 

China owes much of its modern success to absorbing the lessons from past British accomplishments. The UK should start taking lessons from China in turn.

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Sam Olsen is the author of the blog What China Wants and co-founder of MetisAsia.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.